Lecture Business: A changing world - Chapter 7: Managerial decision-making

After reading this chapter, you will be able to: Define management and explain its role in the achievement of organizational objectives, describe the major functions of management, distinguish among three levels of management and the concerns of managers at each level, specify the skills managers need in order to be successful, summarize the systematic approach to decision making used by many business managers, recommend a new strategy to revive a struggling business.

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Chapter Seven

Managerial Decision­Making

A process designed to achieve anorganizations objectives by using itsresources effectively and efficiently

in a changing environment

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Staffing the

organization with qualified people

Directing employees’

activities toward achievement

of objectives

Controlling the

organization’s activities

to keep it

on course

Plans

Tactical Plans

Strategic Plans

Specify actions to achieve tactical plans (very short­term)

Designed to implement strategic objectives (usually one year or less) Establish long­range

objectives

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Levels of Management

First­Line Management Forepersons, Supervisors, Office Managers

Middle Management Plant Managers, Division Managers,

Department Managers

Top Management President, CEO, Executive Vice Presidents

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Factors in Organizations That Cause Differences in Management Activities

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1.

Level of Management

Management Activities

6.

Profit versus Nonprofit Organization

2.

Area of Management

4.

Organizationa

l Culture

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Favorite Executive Recreation

What chief financial officers at large corporations say is their favourite activity.

Source: Accountemps

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high energy empathy intuitiveness

• Active

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• Relate to people

in intuitive,  empathetic ways

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Source: “Leading vs. Managing ­ They’re Two Different Animals,”

Online Women’s Business Center, October 19, 1998.

Making Process

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Recognize and define the

decision situation

Develop

Implement the decision Monitor theconsequences Select the

best option

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J.P. Kotter’s Two Basic  Management Functions

• Figuring out what to do despite uncertainty, great diversity, and an enormous amount of potentially 

relevant information

• Getting things done through a large and diverse set of people despite having 

little direct control over most of them

Evaluate Infinity’s current situation and analyze its strengths and weaknesses. 

Evaluate the opportunities for Infinity, including using its current strategy and propose alternative strategies. Suggest a plan for Infinity to compete successfully over the next ten years

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Explore Your Career Options

In which types of industries or sectors are managers the most likely to be 

hired?

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formance reward system Evaluate Alternatives Cost

Feasibility of implementing Expected outcome

Choose Alternative Developing individual per­

formance reward system

Identify Rewards to be Used Set Standards for Performance Communicate Standards to  Employees

Ensure Employees are  Adequately Trained Determine Method of  Measuring Performance Collect Performance Data Administer Rewards to  Employees Reaching  Standards

Information Gathered Using Informationto Make Decision ImplementingDecision

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Can subordinates depend on leader

(trust)?

No­cannot predict what will happen

yes­can expect late,

disorganized, often negative behavior

yes­can feel safe because they trust action even when they disagree

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Source: “What Is Your Management Action Style?” from the Online

Women’s Business Center, http://www.onlinewbc.org/docs/

manage/style.html, October 19,1998.

action style?

Action Style Choices for Managers Inactive Re­active Pro­active

Quality of training for subordinates?

little, if any negative becauseit's given to

correct action already taken

organized;

gives what is expected to do job, time to practice, and re­evaluate Productivity

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Additional Discussion  Questions and Exercises

d Leaders let employees work without much interference.

Information

• Accountability of organizations

• Identifying the purpose of information  collected

• Consent of the information provider

• Limiting collection of information

• Limiting the use, retention and disclosure of  information collected